Serco bags £322m contract extension for Test and Trace, is still struggling to share data with local authorities

Serco has been awarded a £322m contract to continue its work on the COVID-19 Test and Trace system in England and Northern Ireland.

In an announcement to the markets today, the outsourcing giant said the new contract had been awarded after a competitive process run by the Department for Health and Social Care and the Crown Commercial Service. It runs for 12 months, with an option to extend for a further six months. The actual contract value could differ from the stated £322m, as it would be “matching services to the demand for testing over the coming months.”

Serco was part of a gang of consultants and outsourcers who helped build the test and trace system for the government’s COVID-19 response.

The total spending on NHS Test and Trace is expected to be £22bn, with £7bn yet to be allocated. In February, MPs grilled head of the UK's NHS Test and Trace programme Dido Harding on whether it was money well spent.

They pointed out that a Parliamentary answer published in January revealed spending had reached £375m, covering 2,300 individuals working for 73 suppliers.

In December last year, UK public spending watchdog the National Audit Office said that the system had not yet achieved all its objectives, “with too few test results delivered within 24 hours, and too few contacts of infected people being reached and told to self-isolate.”

It said it must improve information sharing with local authorities, to help efforts to suppress outbreaks.

Just last week, however, the NAO published a follow-up report that said this was not happening.

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“Local authorities still struggle to get timely access to the data they need to deal with localised outbreaks of COVID-19, and they are unclear on the planned operating model after July 2021,” the report claimed.

It is not just Test and Trace putting the pound signs in the eyes of Serco CEO Rupert Soames. The private sector contractor also picked up a £424m contract extension for the vaccine rollout whose value was made public on 22 June.

Serco is also profiting from local government during the pandemic. In June last year, UK local authority Hertfordshire County Council postponed plans to end its £250m outsourcing deal with Serco, opting instead to pay another £50m to stay with the contractor, in part because of the COVID-19 outbreak.

So, when Soames’s grandchildren look him in the eye and ask what he did in the pandemic, he can answer “got richer” in all honesty. In February this year, Serco reintroduced dividends to shareholders for the first time in seven years, after its annual profit increased by a third to £163m and revenue went up to £3.9bn.

Soames, the grandson of Winston Churchill, was paid £4.9m in total last year, including bonuses. ®